In: Economics
a) Suppose that the government plans to impose a tax on labour employed as an input in agriculture. Consider agriculture as a highly labour-intensive sector and discuss the possible effects of the tax, using the general equilibrium framework. b) Suppose that the government of your province has decided to provide a housing subsidy for low-income families of the province to raise their standard of living. The government has also decided to impose an income tax on workers (employees) to generate funds for the subsidy. Analyze the welfare effects of this decision. What are the suggestions you can make to minimize any negative welfare costs?
Answer :-
Suppose that the government plans to impose a tax on labour employed as an input in agriculture. Consider agriculture as a highly labour-intensive sector and discuss the possible effects of the tax, using the general equilibrium framework?
a) :- The work utilized as a contribution to the agribusiness part work more enthusiastically and win their income .As in summed up equilibrium system and particularly when the segment is exceptionally work extreme area , it will have an effect on the demand of the work who are putting their work in this division as an info.
The demand of the work will decrease and the all out yield growth of horticulture will be influenced and have a negative effect all in all on the economy
Suppose that the government of your province has decided to provide a housing subsidy for low-income families of the province to raise their standard of living. The government has also decided to impose an income tax on workers (employees) to generate funds for the subsidy. Analyze the welfare effects of this decision. What are the suggestions you can make to minimize any negative welfare costs?
b) :- The tax imposition on the income of the workers and giving appropriation to the lower income individuals who can't manage the cost of home wil positively affect the government assistance on the general public and the economy in general .This won't just give the home to the needy individuals yet additionally , it will improve the foundation of the general public .
Overall it is the government assistance prosperity of the general public .I will propose to force tax likewise on the diverse division of monopolistic busiiness which make immense edge and utilize that tax on the home endowment for the poor income families .